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Don't Get Sick After You Retire

Here's another good reason to eat your leafy green vegetables and dig your running shoes out of the back of the closet. Fidelity Investments estimates that a 65-year-old couple who retires this year will need about $215,000 to cover medical costs in retirement.

That's a pretty mind-boggling pile of cash. It's also a lot more -- 7.5% more -- than last year's figure. In 2006, Fidelity calculated that retirees would need $200,000 to cover their post-retirement health costs.

In the five years that the investment and mutual funds company has been calculating the size that your health-care nest egg needs to be in order to stretch through retirement, the amount has gone up an average of 6.1% every year.

If you happen to be among the dwindling minority of people who have retiree health coverage through your employer, you won't need quite so much. But Fidelity assumes you won't have that coverage, and more and more retirees should probably assume the same thing. Health insurance for retired workers may soon be as extinct as dinosaurs.

Costs add up
The estimate incorporates expenses for Medicare Part B (for doctors and other medical services) and Part D (the new prescription drug plan) premiums. It also includes Medicare's cost-sharing expenses, like co-payments, co-insurance and deductibles, along with your out-of-pocket costs. It doesn't include some other expensive items, like dental services and long-term care. It also assumes that you won't purchase Medigap insurance, a product offered by insurance companies like Aetna (NYSE: AET  ) and UnitedHealth Group (NYSE: UNH  ) that charges monthly premiums to cover your share of many Medicare costs.

Fidelity also assumed that men retiring this year will live another 17 years, and women will live another 20 years. If you expect your family's genes will keep you trucking along well into your 90s, you might want to rethink that assumption.

To put this year's figure into a little bit more perspective, the investment and mutual funds company offers this example: A 65-year-old worker earning $60,000 who retires today can expect that 50% of his or her pre-tax Social Security benefit will be used to pay for personal health-care expenses.

Social Security never promised anyone a lavish lifestyle, but that's still a major drag on retirement income. For most people, a comfortable retirement will necessitate supplementing those Social Security benefits with personal savings.

What to do
It's tempting to look at these and other dire retirement projections and write off a lifetime of retirement plans for world travel, lavish gifts for the grandchildren, or pilot lessons. Start early enough, however, and you can build a personal savings nest that will meet your retirement goals and keep you in good health.

To do so, you'll need to get a clear picture of your priorities now and in retirement. Saving for the future means giving up a little today. A clear picture of both your retirement needs and retirement wants can help you make those small sacrifices. Start by estimating the amount of money you'll need in retirement, and then tailor those estimates to your particular goals. You can get lots of help with this from Foolish retirement expert Robert Brokamp and his Rule Your Retirement newsletter, where you'll read lots about the best way to save and invest your retirement funds.

Even though you may be far from complaints of creaky joints and nagging coughs, you might also want to start familiarizing yourself with the ins and outs of the Medicare system. You can find help right here to better understand Medicare's costs, benefits, and claims. Take a look, too, at these related articles:

Fool contributor Mary Dalrymple welcomes your feedback. She doesn't own shares of the companies mentioned in this article. UnitedHealth Group is both an Inside Value and a  Stock Advisor pick. The Motley Fool has a disclosure policy.

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